Does HR Really Strangle the Economy?

Recently, a national newspaper published an article questioning whether HR departments are strangling the economy.

The article highlighted the growing influence of HR and posed concerns about whether HR decisions always align with the best interests of the company. Specifically, it suggested that HR may prioritise overly cautious practices that protect against legal risks but hinder business growth. This argument sparked my interest because, while it raises valid points, I believe it unfairly paints the entire HR profession with the same brush.

To suggest that all HR professionals are stifling economic progress overlooks the diversity of expertise and approaches within the field. Like any profession, HR encompasses a range of individuals and methodologies. Yes, some larger consultancies may take a risk-averse, “insurance-first” approach, which can sometimes feel overly bureaucratic. However, this is not representative of HR as a whole.

The key lies in finding HR professionals who understand the balance between risk management and business success. Ideally, this would be an independent consultant or an HR leader with experience in the commercial sector. Such individuals bring a practical understanding of the trade-offs businesses face: evaluating whether the risk of keeping someone in the organisation outweighs the potential legal claims of letting them go, or vice versa.

At the core of effective HR is the ability to implement robust systems that support compliance and fairness while allowing flexibility to meet a company’s unique needs. A one-size-fits-all approach doesn’t serve businesses or the economy. Instead, HR should function as a strategic partner, helping organisations manage complex decisions with a view toward long-term success.

It’s important to remember that HR, like any other profession, isn’t immune to criticism or improvement. But to label it as an economic bottleneck overlooks the immense value skilled HR professionals bring in fostering workplace cultures, mitigating risks, and supporting sustainable growth. Rather than generalising, we should focus on elevating best practices and ensuring that HR operates as a true enabler of business success.